Witwatersrand Consolidated Gold Resources Ltd TSX:WGR and Pan African Resources announced a 50:50 partnership to acquire Evander Gold Mines Ltd from Harmony Gold Mining Company Ltd HMY. The price comes to ZAR1.7 billion (approximately CAN$221 million) less any distributions made by Evander to Harmony prior to the closing date, which will be the later of July 2, 2012, or the fifth business day after the last of the conditions is either fulfilled or waived. Wits Gold and Pan African will acquire equal proportions of Evander’s issued share capital and the Evander loan account due to Harmony. The two companies will settle the transaction with a combination of debt and equity.
Evander’s gold operations are located in Mpumalanga Province, South Africa. They comprise the operating Evander 8 shaft and several potential development projects—Rolspruit, Poplar, Evander South, the Kinross metallurgical processing plant and a tailings facility. The Evander 8 shaft has an expected mine life exceeding 10 years. Evander has recently improved performance by closing unprofitable shafts and plants, as well as upgrading infrastructure.
Wits Gold CEO Philip Kotze stated, “This transaction allows Wits Gold to become a producer overnight and the cash generated from this operation will be used to partly fund our growth projects. Forming a partnership with Pan African has enabled both companies to make an offer for a better quality operating asset with significant upside potential. We look forward to working together with our partners to provide the best value for all our shareholders.”
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Witwatersrand Consolidated Gold Resources Ltd
or Hethen Hira
Investor Relations Executive
Pan African Resources
or Louise Brugman
Media and Investor Relations
Harmony Gold Mining Company Ltd
by Greg Klein